Introduce capital gains tax so the wealthy can help society

Introduce capital gains tax so the wealthy can help fund social
spending

MP DENISE Phua (Moulmein-Kallang GRC) proposed an increase in
income tax rate for top earners to help pay for increased social
spending ('Tax rich more to fund social spending'; Wednesday).

In my view, we should focus on another aspect of tax policy: the
absence of a tax on investment returns.

We should take a leaf from multi- billionaire American investor
Warren Buffett's book. He advocated taxing his wealthy peers,
arguing that the rich pay less tax because their capital gains are
taxed at only 15 per cent in contrast with an income tax rate of 30
per cent.

According to him, such a tax policy has resulted in the absurd
reality of someone so wealthy like him enjoying a lower tax rate
than his office staff.

The general trend is that the wealthy derive a far greater
proportion of their earnings through investments, as compared to
the less well-off.

This is for the simple reason that they have more savings and
hence the capital to invest.

In Singapore, capital gains as a result of personal investments,
such as stocks and property, are not taxable.

Introducing a capital gains tax will ensure that everyone pays a
fair tax on all his income, regardless of the source of the
income.

This will provide a substantial amount of Budget revenue to fund
the social and productivity initiatives.

Very unlikely for the government to introduce capital gains tax.
Imagine the capital gains tax on all those 99 year lease bungalows
on Sentosa Cove… how many foriegners or even local investors would
invest , if so? They cannot let capital gains tax be the death
knell for the lucrative hot property market! Don’t expect themarket
to fall . even for HDB flats at most they
maintain their current high prices, for the time being.

Absolutely ridiculous to introduce capital gains tax. Property
transactions and speculation is in itself a thriving business! Look
at the amount of stamp duties collected! Why introduce capital
gains tax to kill the golden goose (property speculation and
transactions)? Imagine your great grandfather left you a huge
bungalow 25,000sf feet which he bought in 1940’s for a pittance of
20,000/- And now it is worth 20million at least! How much capital
gains tax must you pay?